Comcast commits $175M to license Harmonic’s CableOS virtual CCAP

China Mobile International, Facebook and AWS have commissioned a subsea cable linking Hong Kong, Singapore and the US (Image NicoElNino / iStockPhoto)
Harmonic said that it is in various stages of CableOS trials with four out of the top eight Tier 1 operators in the U.S. and Europe. (NicoElNino / iStockPhoto)

Harmonic got a big boost for its CableOS virtual converged cable access platform (CCAP) after Comcast this week signed a licensing deal worth $175 million.

According to an 8-K filing (first spotted by Light Reading), Comcast Cable Communications Management committed to a four-year enterprise license for CableOS software, and will pay the initial $50 million of the enterprise license fees in 2019.

The new deal follows a warrant agreement from 2016 that gave Comcast the right to purchase up to approximately 7.8 million shares at a price of $4.76.

During an earnings call in April, Harmonic CEO Patrick Harshman called the Comcast warrant “extremely important” for his company and said that “it is a top priority of our business in general and our CableOS initiative in particular to be a successful technology partner deployed in volume by Comcast,” according to a Seeking Alpha transcript.

CableOS lets cable operators run multi-gigabit capacity networks using less space and power by using software that can run on off-the-shelf hardware. The software runs on a 1-RU Intel x86 server and allows for updates including next-generation standards, DOCSIS 3.1 capabilities, and more capacity through the addition of more servers.

RELATED: Harmonic adds two new customers for CableOS virtual CCAP

Harmonic said that it is in various stages of CableOS trials with four out of the top eight Tier 1 operators in the U.S. and Europe. Last year, Harshman said that Harmonic had more than 12 CableOS revenue-generating deployments and advanced field trials underway worldwide. The company said at the end of the most recent quarter that the global number of commercial deployments and field trials had grown to 32.

During the first quarter, Harmonic signed an agreement with the National Cable Television Cooperative to jointly offer CableOS to the co-op's more than 750 cable operator members.

The company cited research saying that the market for virtualized Cable Modem Termination System (CMTS) and distributed access technologies will grow to just under $2 billion by 2023.

Dell’Oro Group released a report last month observing that global revenue for broadband access equipment declined 2% during the first quarter.

“The 10 Gbps FTTH deployments continue to build momentum,” said Jeff Heynen, research director, broadband access and home networking at Dell'Oro Group. “The next-gen fiber increases nearly offset the weakness in cable CCAP spending, as cable operators push off new capacity purchases while they determine how to move forward with distributed access architectures."